Radio Advertising Costs & How to Negotiate Lower Rates 2019

Radio advertising costs range from $200 to $5,000 per week depending on location and the size of the listening audience. The cost of producing the commercial is $1,000 to $2,500 depending on what is included like music, voice actors, and editing. Some stations have their own advertising production teams to save costs.

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How Much Does a Radio Ad Cost?

As a guidepost for radio advertising costs, we examined estimates from the experts at Strategic Media. Radio advertising in New York City might cost as much as $4,981 per week while Topeka, Kansas, costs only $231.75 per week. Prices are based on the number of spots and the cost per 1,000 listeners.

Sample Radio Advertising Costs

It’s important to keep in mind that the figures above represent pricing for different time slots. Do not divide the total cost by the number of ad spots to determine how much you are paying for each spot. This will not be accurate because some times of the day are much more expensive than others.

Radio Ad Cost Equation

The general formula for determining the cost of a radio ad is simple:

Number of people listening x Cost to reach 1,000 listeners (CPM) = Cost of advertising per spot

You can expect a CPM rate for daytime spots between $12 and $16 for adults between the ages of 18 and 49. This rate decreases to around $8 to $12 for adults age 50 and older. If you are looking to advertise in the evening or overnight, you can expect rates to be lower.

Some radio stations will offer pricing per spot, especially for times of the day when there are fewer listeners. This makes the ads seem cheap but only because you are reaching a fraction of the listener base of a daytime audience.

For example, a spot that airs at 1 a.m. may have less than 1/10th the listeners of a spot that airs at 1 p.m. By pricing by open spots, a radio station can make the cost per spot sound very cheap. To ensure you’re getting full reach and accurate pricing, however, ask for cost per thousand listeners, or CPM.

Factors That Affect Radio Ad Costs & Examples

While many factors can affect radio ad costs, most are tied into listener demographics, competition, and how well an advertiser can work out a reasonable ad cost with a station. Below are the major factors, along with examples to help illustrate how they can affect ad costs.

Primary Radio Ad Cost Factors

The underlying factors that contribute to price are how many people are listening during your time slot, the demographics of the listeners, number of competitors in your market, and how well you can negotiate with the radio station.

Here are the significant factors that influence radio advertising costs:

• Number of listeners: The more people who tune into the station and will hear your commercial, the more you can expect to pay.
• Demographics: Some target groups are more popular among advertisers than others. For example, expect to pay more for an audience of adults aged 25 to 54.
• Competition: If many different businesses are looking to run ads at the same time, the station can drive up prices. This could occur, for example, during the holiday season when many retail stores are advertising sales.
• Negotiation: Generally, a station will send you a pricing proposal for your ad, but this is not necessarily the final price. You should be able to negotiate down 20% to 40%, depending on your negotiation skills and the terms of your contract.

Examples of Cost Factors Applied to Radio Ads

Not all radio ads are priced the same way, and the final cost depends on the station’s policies, listeners, demand/competition in a specific market, and other variable factors. To help demonstrate some of these in action, we’ve outlined two examples below.

Cost Based on the Demographics of Listeners

If the majority of a radio station’s audience falls outside the 25 to 54 age range, you can expect the CPM rate to be on the lower side. If a station has a predominantly male audience between 18 and 35, you should expect rates to be higher. If a station attracts a wealthy audience—as is commonly the case for a jazz or classical station, for example—you should also expect to pay a higher CPM rate.

Cost Based on Competition & Temporary Demand

If there’s a popular event happening in town like a highly contested political election, price for an ad spot will jump. You will have to match these new rates, or else your spot will be given up to someone willing to pay more than you. A similar situation can occur during the holiday season when major retail stores are competing to advertise their holiday sales on the radio.

5 Ways to Get the Lowest Radio Advertising Cost

Now that you have background information on how radio stations will price an ad spot, you can begin negotiating your price. Negotiating a price might take several efforts, and you might have to compromise to get within your budget. Start with the advertising rate card provided by the station. With these prices as your baseline, ask for discounted rates, offer giveaways and contests, shop around, and consider nonpeak times for advertising to save money.

Here are a few methods you’ll want to use to negotiate your advertising rate:

1. Start with a rate card: The rate card will provide you with the general pricing framework, which is different than a customized proposal. The rate card will give insight on the maximum amount you will have to pay. It should include a chart with standard pricing for different times of the day. If you are a good negotiator, you should be able to get 20% to 40% off of this price.
2. Ask for discounts: The first time you advertise, be sure to ask for a new advertiser discount. While a station may or may not offer such a discount, it leaves the door open for negotiating a lower price. There should also be volume discounts if you purchase multiple ad spots at once.
3. Offer a trade: Radio stations are always looking for giveaways, so try offering one of your products for free in exchange for an advertising spot. You may not get all of your ad cost covered, but you could drive the cost down.
4. Shop around: Make sure you ask around at different stations in your area so that you get a sense of what the average prices are. If one station gives you a lower price, let the station with the higher price know to try to get them to reduce the cost. This may not always work, especially if one station has a different target demographic, but it can potentially get you some price reductions.
5. Let the radio station pick your ad time: Another option to lower your rate is to let the radio stations decide when your advertisement runs. This gives them the authority to put your ad in their schedule as it fits their needs. In exchange, they give you a much lower rate.

Any combination of the above methods can work to help you secure the lowest possible price for your ad. However, keep in mind that you will likely have to run your ad multiple times to notice a return on investment, so make sure you factor that in when negotiating ad rates.

Radio Advertising Cost Proposal Terminology

When your local radio station puts together a media buying proposal with a rate chart of costs, they will probably include many terms specific to radio advertising. This can make the proposal difficult to understand. To help, we’ve offered a quick glossary guide below.

Here are a few definitions of terms you will see in a radio proposal:

• Len: Length in seconds, or how long the radio ad is once produced
• Spots: Number of times the commercial will run
• Rate: Cost per advertising spot
• Cost: Rate times the number of spots
• Average quarterly hour (AQH): The average number of persons listening to a particular station for at least five minutes during a 15-minute period
• Frequency (Freq): The average number of times the same person will hear a commercial
• Net reach: The number of different people reached in a given ad run

Because there are many words and terms that are unique to radio advertising, you want to understand them before agreeing to a price. Read a full list of radio terms and definitions for more background.

Cost of Creating a Radio Ad

The cost of creating a radio ad, which is separate from the cost to run it, depends on whether you made the ad or you hire an agency. Creating your own ad and hiring a voice-over artist could cost $5. Working with an agency might cost $1,000.

Hire a Voice-over Artist

Hire someone to record your ad for as low as $5 by searching for a professional voice-over actor on the freelancer platform Fiverr. Be sure that you understand the radio stations guidelines and write the script yourself. Also, vet all candidates by asking them for testimonials from clients and past advertisements you can listen to.

Work With a Marketing Agency

If you choose to hire an outside marketing agency, find one with proven experience creating successful radio ads. This option is not cheap, and you can expect to pay between $1,000 to $2,500, depending on what is included in your commercial. High-end pricing usually consists of the marketing company writing the ad, using stock music, hiring voice actors, and completing post-production editing.

“Before you try to figure out how you want to spend your advertising, first pick up the phone and call in a few ad agencies to meet with you. Talk to them about your business, talk to them about your advertising budget, and talk to them about why people should call you for their needs.”

—Robert Barrows, Owner, R.M. Barrows Advertising & Public Relations

How Radio Advertising Works

Adding radio advertising to your marketing efforts can increase your exposure in an area and add personality to your brand. Like all advertising, radio ads should represent your business accurately to potential buyers and give them a reason to find out more. To get started with radio advertising, find the right station based on existing show content and listening demographics, negotiate a reasonable price, create an ad, and measure your results.

To start, locate a radio advertising station with the right content and listener base. Most radio stations are local, unless they are national with affiliate stations across the United States, so you will be reaching listeners in the surrounding area. For more information about their content, visit their website and call them to ask for a media kit. If you are seeking a national audience, consider alternative radio stations like Pandora, IHeartMedia, Spotify, and SiriusXM.

Once you’ve identified your ideal station, create your ad. Start by asking the station for its ad specifications, then either hire a freelancer to help you design the ad or work with a design agency. Whichever path you take, make sure the ad is consistent with your brand and offers a clear call to action. Also, make sure you have a way to track its success. Often, advertisers use vanity URLs or phone numbers specifically tied to ads to ensure tracking metrics are accurate.

Once your ad goes live, make sure you keep an eye on customer engagement and sales to see if the ad was successful. Also, keep in mind that you will likely need to run the ad multiple times to see noticeable results. Finally, consider tweaking various elements of the ad to increase engagement or run additional ads to boost other parts of your business. Doing so may well result in increased brand awareness and growth in your customer base.

Alternatives to Traditional Radio Advertising

While traditional radio advertising is mainly local, streaming radio advertising offers a national audience that’s typically segmented based on listener interest and not location. This digital age “radio” advertising allows you to target a much larger audience that is more interested in your specific offerings, provided those offerings aren’t limited to your local area. However, streaming ads can be very costly.

Popular Streaming Radio Advertising Outlets

*Note: SiriusXM is mostly commercial-free, but individual programs run ads.

Bottom Line: How Much Does a Radio Ad Cost?

Radio advertising costs between $250 and $1,000. If you want your radio commercials to be successful, you will probably need to invest a good part of your marketing budget in ad creation and multiple ad runs. However, it’s important to keep in mind that several factors affect radio ad cost, including competition, the number of listeners a station has, and the frequency of advertising.

There are two big drawbacks to radio advertising: cost and inefficient tracking. That’s why you should consider a digital ad medium like Microsoft Advertising instead. Not only is it significantly cheaper than radio ads, but you can also track ad engagement easily and accurately, ensuring you’re making the most of your ad spend. Find out more about the $100 free Microsoft Advertising credit for new advertisers today.

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